Well, no one on the Left, anyway. The indomitable Flip Pidot is trying to come up with a reasonable explanation for why (as I pondered here) Joel Rosenman, the Woodstock guy, would loan forty million dollars to Hsu when only minimal due diligence would have uncovered his shady past.
Flip calls Rosenman “ostensibly unwitting” and I have to share his suspicions. Rosenman might claim that he was just taken in by a slick conman with a dynamite, too-good-to-be-true investment proposal. I hope that once investigators get done looking at Hsu they move on and examine Rosenman’s story of being an innocent victim.
Dupe or co-conspirator, though, I’ve got to think this public display of bad judgment is going to cloud Mr. Rosenman’s future as an investment advisor.
Now I’m going to put on my completely unfounded speculation hat. (It’s cute, it’s a tall cone with little moons and stars on it. Got it from Jerome Armstrong.) In that post linked above, I wondered about exactly what sort of con this is if so much of the money was being bundled into Democratic coffers:
What sort of contacts did Hsu have in China that he thought he could pull this off so profitably? Did Hsu even think this would work? Or was the whole thing another con? That doesn’t seem likely, because this would blow up in Hsu’s face later instead of sooner (although maybe he planned to move the money offshore and then vanish before the post-dated checks came due).
Maybe he thought he could fill those accounts again with money from another, even bigger Ponzi scheme. The other (speculative, I stress!) possibility is that this is an ideal money-laundering scheme:
A. Someone in China tells Hsu to claim that he can deliver an incredibly profitable deal on clothing-manuacturing contracts.
B. Hsu pitches the possibility of a 40% profit on clothing manufacturing, and he attracts investors (Rosenman and his investors) to the tune of $40 million based on this deal. (He might even show the investors some references in China who will vouch that Hsu is for real and can deliver at the price he claims.)
C. Hsu goes out and gets high-end apparel orders from American clothing companies. They are impressed by how cheaply he offers to manufacture the clothing.
D. The orders are sent to the PRC who have people make the clothing to order, and ship it to the USA. The American clothing companies are delighted at the cheap margins and pay Hsu forty million plus forty percent–fifty six million dollars.
E. Hsu pays the American clothing companies’ fifty six million back to the investors, who are happy with their forty percent profit. But Hsu never pays the factories in the PRC, and instead pockets the original forty million dollar investment. The PRC happily absorbs the cost, because they know exactly what Hsu will do with it.
F. The $40 million Hsu is holding never came from the PRC and can’t be traced to them. It’s all from Source Financing investors. The PRC never gave anyone any money except factory owners in China who did the work.
And again I say unto you–this is a spitball theory I’m just throwing up to generate discussion about the issue, and I’m not accusing anyone involved of money laundering. I’m just saying IF HE DID IT, how he could have done it. (You know, like OJ.) It’s not disproved on it’s face by the facts, and it ties up a couple of the loose threads left hanging by the idea that it was all just a big con. With this explanation, everyone gets what they want and no one’s left holding the bag to go to the police. It also doesn’t require the collusion of the Rosenmans. (One possible piece of evidence that might support it is prior completion of similar contracts at a very wide profit margin.)
Potential strike against it: Why were Hsu’s checks bouncing?
Anyway, speaking of asking questions, here’s one of the exit variety: why didn’t the Clintons ask any even when their own people were screaming that Hsu was fishy? Apparently the FBI has a few questions about that.
UPDATE: Since I’m speculating here, there’s another, simpler answer to the “why” question. Why would anyone with an embarrassing criminal past want to distinguish himself as a major Clinton donor?
UPDATE 2: Intellectually curious reader William Amos sends in this Newsweek article about Hsu, which includes a description of a strategy memo from the Hillary campaign:
Earlier this month, Hillary Clinton surrogates invited onto TV talk shows were issued “talking points” in anticipation of awkward questions about the mysterious Norman Hsu. … If asked how Hsu’s criminal record could have slipped through the cracks in the campaign’s vet-ting process for donors, the Clinton supporters were instructed to say they hadn’t participated in the vetting. If pressed, they were told to take a none-too-subtle swipe at Clinton’s chief rival. “Long before Hillary’s presidential campaign took money from Mr. Hsu, Mr. Obama’s senate campaign had as well as a bunch of others,” read the memo, given to NEWSWEEK by a Clinton supporter who didn’t want to be identified revealing internal campaign communications.
Oh, that’s bulletproof. The Obamessiah got $8000 from Hsu. Hillary got $850,000.
As for the Hillary surrogates on talk shows, and how they responded to questions about Hsu, I can just imagine Allahpundit right now frantically tearing through his TiVo’s memory, sobbing Shrillary..say it ain’t so…